LondonMetric has said it is still reaping the benefits of its move away from big-box logistics and retail parks.
In a trading update ahead of its half-year results to 30 September 2022, the last-mile specialist said: “Our pivot away from big-box logistics and operational retail parks into highly reversionary urban logistics and well located long-income assets has seen us benefit from favourable demand/supply dynamics, which is underpinning good income growth.”
Occupancy is at a record 99%, with just 110,000 sq ft available across the portfolio. The average WAULT is 12 years.
“Our high-occupancy, limited-development activity as well as a strong focus on corporate and property costs is allowing us to operate with a very low EPRA cost ratio,” the update added.
LondonMetric added £3.7m to its rent roll in the half year, £2.5m of which was from new lettings.
Its urban portfolio led the growth, with 172,000 sq ft of lettings in Birmingham, Fulham, Halesowen, Stratford and Tottenham achieving rents 12% higher than initial expectations.
The REIT disposed of £120.4m of assets over the period, at a yield of 4.2%.
This includes completion last week of the £21.6m portfolio sale to Ardent.
Acquisitions totalled £99.1m and were largely focused on urban logistics. The 4.3% net initial yield is expected to rise to nearly 5% over the next few years from rent reviews.
Total debt stands at £1.2bn, of which 80% is fixed or hedged.
The update concluded: “Looking ahead, whilst we are living in turbulent times, our strong portfolio metrics, growing income, well managed debt position and high shareholder alignment of interest gives us confidence in our ability to maintain our covered and progressive dividend policy.”
To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews
